PERSONAL BUSINESS; You Might Want to Put Your Credit to the Test

RECENTLY engaged and hoping to buy a house, Amy Mitchell paid $12.95 last February to view her credit score, that important single number that summarizes her overall creditworthiness. She then played with her score: What would it be if she paid off all her credit card balances each month, if she applied for an auto loan, or if she declared personal bankruptcy?

Ms. Mitchell, 34, a management consultant in San Francisco, was trying a new online simulator that allows consumers to see how making certain financial choices, like applying for a mortgage or even closing a credit card account, could alter their credit scores. There are two available right now -- one from the Fair Isaac Corporation of San Rafael, Calif., whose FICO credit scores are used most often by lenders, and another from CreditXpert of Towson, Md., a company that designs credit management tools.

The simulators are an important addition to the credit industry. Only a few years ago the credit-rating agencies kept credit scores secret from consumers. Credit experts say these tools will help people make better decisions and give them more control over their finances. That could be especially helpful as the home-buying season moves into full swing and as more people take advantage of low interest rates to refinance mortgages.

''People don't have to feel that they're at the mercy of financial services providers; they can change their financial lives,'' said Ms. Mitchell, who recently bought a home in Orinda, Calif., a San Francisco suburb, with her fiancé, William Weber, 35, a political consultant.

By working with the simulator, Ms. Mitchell said she learned that paring down her credit card debt would raise her credit score significantly. That may help her if she ever needs to borrow money to fix up or furnish her home, or even refinance the mortgage. ''I had a plan for paying off my debt, and this sort of reaffirmed my decision to do that,'' she said.

The credit simulators are also being used by credit-reporting bureaus and credit counseling agencies as an education tool. And some lenders and brokers are using the programs to distinguish themselves from their competitors in counseling prospective borrowers.

Credit scores have always stumped consumers. Even people who know their FICO scores often don't understand the logic behind them. (They range from 300 to 850, and the higher the number the better.) A person's credit score is based -- in decreasing order of importance -- on the person's payment record, how much is owed, how long the person has used credit, the characteristics of the newest credit and the types of credit being used. Owning too many credit cards often hurts a score, but so does owning too few.

Credit simulators help demystify the scores. Ms. Mitchell used the one from myFICO, Fair Isaac's consumer division.

Introduced a year ago, the FICO Score Simulator offers six kinds of financial conjectures. For example, customers may hypothetically transfer credit card balances, push the spending limits on their credit cards or pay bills on time for the next month, three months or six months. They may even pretend to miss a few payments. (By the way, if your score is now 707, and you missed payments this month on all accounts on which a payment is due, your score would drop to the range of 582 to 632. But if, instead of missing the payments, you paid all your bills on time for the next month, your score could increase to 727.)

Consumers can use the score simulator for 30 days through two packages that can be bought on www.myfico.com (click on ''products''). For $39.95, consumers get credit information from the three major credit-reporting bureaus -- TransUnion, Experian or Equifax -- plus their FICO score, an analysis of the score and use of the FICO score simulator. For $12.95, they get the FICO score plus a credit profile from one bureau and the use of the simulator.

The six options in the FICO simulator correspond to customers' most common concerns, according to myFICO, but some people may want more choices. For instance, the simulator cannot allow more than one hypothetical move at a time.

For a larger selection of financial situations, there is the What-If Simulator from CreditXpert. Introduced in February, this simulator can also advise consumers on how to achieve goals like refinancing or simply improving their scores. Unlike the FICO Score Simulator, it allows customers to see how multiple actions would affect their scores.

The What-If Simulator is not available directly from CreditXpert but can be bought at varying prices from some lenders, credit reporting agencies and other sellers of credit reports. A list of some sellers is at www.creditxpert.com (on the ''consumers'' page). Among the brokers that offer it are 1st Republic Mortgage Bankers in Floral Park, N.Y., and Capitol Mortgage Finance in Columbia, Md. It is available for $9.95 from Intersections in Chantilly, Va., which sells credit reports and privacy protection services; Intersections calls it the Credit Analyzer.

Christos Balis, 37, a chiropractor in Herndon, Va., recently used the What-If Simulator to look at the cumulative effect on his credit score of refinancing his mortgage, paying $3,000 on one of his credit cards and taking out a loan for some home renovations.

He was simulating a plan that he and his wife, Tamara, 32, a director at a Montessori nursery school, were considering to help them finance a $10,000 remodeling of their kitchen.

Dr. Balis said he learned that his credit score would gain twice as many points if he made a sizable payment on one particular credit card than it would if he made a comparable payment on another card. (He was closer to the credit limit on the first card.) He also found that a loan to remodel the kitchen would have little effect on his score. ''That actually was news to me,'' he said. ''It gave me a sense of security.''

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He said that before using the simulator, he was more inclined to spend his and his wife's savings on the kitchen. Now they are more likely to apply for a loan, he said, and to put some savings toward the credit card as suggested by the simulator.

LENDERS generally do not use CreditXpert's scores to make their lending decisions. But CreditXpert said the scores use the same principles as the FICO scores; they were developed when Fair Isaac still withheld its scores from consumers.

''The fundamental principles behind credit scoring are the same; it's just a matter of how you put the pieces together,'' said David G. Chung, CreditXpert's interim president and vice president for business development. ''The things that will move you up our scale will move you up somebody else's scale.''

Because a person's credit profile can change constantly, both myFICO and CreditXpert say that the actual score may not increase or decrease by the exact number of points calculated by the simulators. But it should certainly move in the expected direction, they said, and often by roughly the same number of points.

The companies say that just as high school students routinely take practice tests to raise their College Board test scores, so, too, can consumers use simulators to help raise credit scores. That would give people more control over their credit -- and what they pay for it -- the companies said.

''Consumers by and large are very aware of credit reports; they are now getting to have awareness of how to improve their credit scores,'' said Sue A. Simon, the vice president of myFICO. ''It's a whole different ballgame when you realize it can save you $300 a month on your mortgage payment.''

The Fair Isaac Corporation, which puts out the industry-standard FICO scores, offers the myFICO simulator. A consumer with a score of 707 (considered good) and three credit cards would be likely to add or lose points from his score by making various financial moves. Following are some examples:

* By making timely payments on all his accounts over the next month or by paying off a third of the balance on his cards, he could add as many as 20 points.

* By failing to make this month's payments on his loans, he could lose 75 to 125 points.

* By using all of the credit available on his three credit cards, he could lose 20 to 70 points.

* By getting a fourth card, depending on the status of his other debts, he could add or lose up to 10 points.

* By consolidating his credit card debt into a new card, also depending on other debts, he could add or lose 15 points.

The other simulator, the What-If, comes from CreditXpert, which designs credit management tools and puts out its own, similar credit score. A consumer with a score of 727 points (also considered good) would be likely to have her score change in the following ways:

* Every time she simply applied for a loan, whether a credit card, home mortgage or auto loan, she would lose five points. (An active appetite for credit, credit experts note, is considered a bad sign. For one thing, taking on new loans may make borrowers less likely to repay their current debts.)

* By getting a mortgage, she would lose two points.

* By getting an auto loan or a new credit card (assuming that she already has several cards) she would lose three points.

* If her new credit card had a credit limit of $20,000 or more, she would lose four points, instead of three. (For every $10,000 added to the limit, the score drops a point.)